The Evolving Role of the Federal Government in Retirement Savings
By: Tony Roda and Ryan Muller, Williams & Jensen PLLC
The federal government is beginning to take a more active role in private retirement savings through Trump Accounts, the Saver’s Match, and related policy initiatives, raising questions about retirement preparedness, access, and the future relationship between private accounts and Social Security.
The federal government is poised to insert itself into retirement savings in a significant new way, looking to bolster the private retirement accounts of millions of Americans through a series of cash contributions. Whereas the federal government previously exerted itself through a mix of tax deductions, exclusions, credits, and deferrals, the current Administration is pursuing a more engaged role. Building on the successes of 2022’s SECURE Act 2.0,1 the One Big Beautiful Bill Act,2 and a slate of executive orders, the Administration has sought avenues to put money directly in Americans’ pockets, or rather, their retirement accounts.
Looking at the data, the Administration’s recent focus on this issue is understood and perhaps warranted. According to the Investment Company Institute, in the fourth quarter of 2025, Americans held $19.2 trillion in IRAs, $14.2 trillion in employer-provided defined contribution plans, and $13.1 trillion in employer-provided defined benefit plans. Despite these vast aggregate sums, however, many Americans are dramatically underprepared for retirement. Data from the Federal Reserve’s 2023 Survey of Consumer Finances shows a growing disparity between the richest Americans and the rest of the country when it comes to retirement savings. In 2022, the average family held over $300,000 in retirement accounts, far and away greater than the $87,000 held by the median family, evidence of a disproportionate share of assets held at the top. While the median family in the top income decile holds over $550,000 in retirement savings, those in the bottom quintile have less than $20,000. Compounding this problem is the fact that fifty-six million working Americans, which is approximately half of the workforce, do not have access to an employer-provided plan. Like many others, the Administration sees this as a problem.
The Administration’s marquee accomplishment in the retirement space has been the nascent Trump Accounts. Constructed to operate like a traditional IRA, Trump Accounts are designed to get Americans saving early. Though available to all who are under eighteen years old, the law targets those even younger, incentivizing parents to sign up their newborns by offering a $1,000 contribution to the accounts of those children born between 2025 and 2028. Some are seeking to make this pilot program a permanent fixture of these accounts. Representative Adrian Smith’s (R-NE) Trump Accounts for All Generations Act would permanently extend this aspect of the accounts, indexing the one-time contribution to inflation after 2028.3
The Administration estimates that these accounts can meaningfully increase savings for Americans without significant resources, setting up children for later financial stability. Using “historical S&P 500 averages,” a Trump Account is forecast to hold over $240,000 in assets by the time the child reaches fifty-five years old, even if not a single dollar beyond the government’s initial deposit is ever contributed to the account. Assuming a more generous annual contribution of $5,000, the current statutory maximum, a single account could be worth more than $13 million by age fifty-five. While these are merely projections and are by no means guaranteed, these accounts figure to make a meaningful difference in retirement preparedness for those at the lower end of the income distribution.
Objections have been lodged against this program, with critics pointing out that the children of well-to-do parents who can make annual contributions will benefit disproportionately. This fact notwithstanding, a rising tide lifts all boats, and all participants stand to benefit from this program.
Efforts to ensure a more sustainable and secure retirement go beyond just providing for children through Trump Accounts. The Saver’s Match, written into law under SECURE 2.0, is scheduled to become effective in 2027. The Saver’s Match largely replaces the Retirement Savings Contribution Credit — or Saver’s Credit — which is a generally ineffective program that was neither widely known nor particularly successful at encouraging low-income taxpayers to save.4 Rather than being structured as a nonrefundable tax credit, the Saver’s Match will provide qualifying individuals with a 50 percent match on up to $2,000 in retirement savings for a total annual match of up to $1,000.
Though a step in the right direction, the Saver’s Match still will likely have limited uptake and benefit. The first limitation is related to a saver’s income: only those with modified adjusted gross incomes (AGIs) below $20,500 ($41,000 for married filing jointly) will qualify for the full 50 percent match, with a gradual phase-out of the benefit for AGIs up to $35,500 ($71,000 for MFJ). At these income levels, many would-be savers lack the disposable income to make retirement contributions. Additionally, while intended to reach more people than the Credit, the Match is understood to be less generous than its predecessor, with the Credit allowing for greater out-of-pocket contributions, thus allowing a taxpayer to access greater benefits.5 The Match also fails to address barriers that prevent low-income individuals from saving, including the aforementioned lack of access to employer-provided savings plans. A final shortcoming of the Saver’s Match is the so-called “Roth-mismatch,” where contributions to a Roth savings account qualify a taxpayer for the Match, though the Match itself must be deposited into a traditional retirement account. While this represents an easy legislative fix, it nevertheless indicates another shortcoming of this tax incentive as it currently exists.
Despite these potential issues, the Administration appears set to take steps to implement the Saver’s Match, both independently and as part of a new type of IRA. In his February State of the Union, President Trump alluded to the Saver’s Match, promising “[w]e will match your contribution with up to $1,000 each year, as we ensure that all Americans can profit from a rising stock market.” The President lamented that half of working Americans do not have access to an employer-provided retirement plan and, in response, issued Executive Order 14403, entitled Promoting Retirement-Savings Access for American Workers by Establishing TrumpIRA.gov, by which the Secretary of the Treasury is directed to establish a website that provides individuals “with information about high-quality, low-cost IRAs” while also pairing it with the Saver’s Match.6
This new role for the federal government as a direct contributor to private retirement savings raises the question of what the impact will be on Social Security. Well-documented solvency issues are fast approaching, and no single policy change or combination of changes has wide bipartisan support. So, could the federal government’s emerging new role as a direct contributor to private retirement accounts represent the beginning of a true pivot from the traditional Social Security program? This remains an open question.
Please be assured that NCPERS will closely monitor developments in this area of public policy and will apprise its members of any significant developments.
1 P.L. 117-328
2 P.L. 119-21
3 Congress.gov. “H.R.8313 - 119th Congress (2025-2026): Trump Accounts for All Generations Act.” April 15, 2026. https://www.congress.gov/bill/119th-congress/house-bill/8313.
4. Congress.gov. “The Retirement Savings Contribution Credit and the Saver’s Match.” May 13, 2026. https://www.congress.gov/crs-product/IF11159.
5. Ibid
6. Executive Order 14403 of April 30, 2026, Promoting Retirement-Savings Access for American Workers by Establishing TrumpIRA.gov,” Federal Register 91, no. 86 (May 5,
2026): 24329–24331, https://www.govinfo.gov/content/pkg/FR-2026-05-05/pdf/2026-08908.pdf.